February 25, 2013

Top Portfolio Products: State Street Launches Two Low-Volatility SPDRs

In addition, Fidelity says it will close two share classes of the Fidelity Small Cap Value Fund

New products introduced over the last week include two new SPDR ETFs from State Street.

In addition, Fidelity Investments announced that it would close the retail and advisor share classes of its Small Cap Value Fund to new accounts as of March 1.

Here are the latest developments of interest to advisors:

1) State Street Unveils Low-Volatility SPDR ETFs

State Street Global Advisors, the asset management arm of State Street Corp., said Thursday that it had launed the SPDR Russell 2000 Low Volatility ETF (SMLV) and the SPDR Russell 1000 Low Volatility ETF (LGLV), designed to provide investors with exposure to small- and large-cap equities while managing risk.

SMLV seeks to track the performance of the Russell 2000 Low Volatility Index. The index is composed of low-volatility stocks from the Russell 2000 Index based on volatility from the previous 252 trading days; it is then optimized to provide low-volatility small-cap exposure while managing turnover and neutralizing other factors, such as beta and momentum. SMLV’s expense ratio is 0.25%.

LGLV also seeks to track the performance of the Russell 1000 Low Volatility Index, the Index optimized to provide low-volatility large-cap exposure while managing turnover and neutralizing other factors, such as beta and momentum. LGLV’s expense ratio is 0.20%.

2) Fidelity Investments to Close Two Small Cap Value Fund Share Classes

Fidelity Investments announced Thursday that it is closing the retail and advisor share classes of the Fidelity Small Cap Value Fund (FCPVX) to new accounts. As of the close of business on March 1, 2013, new purchases in the fund will be limited to existing shareholders.

FCPVX seeks capital appreciation by normally investing at least 80% of its assets in securities of companies with small market capitalizations (those with market capitalizations similar to companies in the Russell 2000 Index or the S&P Small Cap 600 Index) and using fundamental analysis to identify companies that management believes are undervalued in the marketplace.

The fund, co-managed by Chuck Myers and Derek Janssen, had $3.5 billion in assets under management as of January 31, 2013.

Fidelity will open new accounts in retail and advisor share classes of FCPVX until 4 p.m. ET on March 1. After that, investors generally will not be able to open new accounts in the fund. However, existing shareholders already invested in the fund can continue to add to their accounts.

Employer-sponsored retirement plans and certain discretionary programs offered by RIAs may be able to open additional accounts for investors if the fund was established as an option as of March 1, 2013. However, after March 1, 2013, Fidelity will no longer accept new investors into the fund, and retirement plan sponsors and advisors who have not established the fund as an investment option by March 1, 2013, will no longer be able to do so.

Read the Feb. 15 Portfolio Products Roundup at AdvisorOne.

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